GM, union spar over plant closures as bankruptcy looms

DETROIT, Michigan, May 10, 2009 (AFP) - General Motors is sparring with its main union over plans to shut US plants and outsource production to Mexico and Asia as bankruptcy looms over the troubled automaker, union sources said.

Negotiations were also complicated by a long-standing feud between GM and the United Auto Workers as they raced to fashion a new labor agreement ahead of the June 1 deadline imposed by President Barack Obama's automotive task force.

"This is really about the shape of GM in the US and its foot print in North America in the future," a senior UAW official who asked not to be identified told AFP.

Neither the UAW nor GM would comment on the status of negotiations which formally began last week, although two senior union officials went public with their criticism.

"The UAW strongly objects to GM's restructuring plan because it essentially means that GM will be shifting more of its manufacturing footprint from the US to Mexico, Korea, Japan and China," UAW legislative director Alan Reuther wrote in a letter to Congress.

"If GM is going to receive government assistance to facilitate its restructuring, along with the benefits from tremendous sacrifices by UAW members and other stakeholders, we believe it should have an obligation to build in this country the vehicles it will be selling in the US," he added.

The comments were echoed by UAW vice president Bob King, who is widely expected to become the UAW's next president in 2010.

"There are some companies that want to sell cars here that they are not going to build here," King said during a celebration of Ford's plans to re-tool a plant near Detroit to build small cars instead of trucks.

"There are some restructuring plans that are saying they want to take the jobs out of America and they want to build (cars) in China and Korea and Mexico rather than building them in the United States of America," King said.

Ford's new product plans also call for building a new subcompact car at the Cuautitlan Assembly plant near Mexico City.

But relations between the UAW and GM have traditionally been more acrimonious than those between the UAW and Ford, which has not faced a strike since 1976 and has was the first of the Detroit Three to obtain major concessions from the union even though it hasn't sought federal aid.

The UAW has said it will use a "historic" deal with Chrysler and Fiat - that gives it 55 percent of the stock in the auto company when it emerges from bankruptcy in exchange for major concessions - as a template for negotiations with GM.

And Reuther said the union is "prepared to make similar sacrifices to facilitate the restructuring of General Motors" to the concessions granted Chrysler and Ford.

However, union officials are still fuming privately over the role GM played in a long, bitter strike last year at supplier American Axle Manufacturing & Holding Co. Inc. in Detroit.

More than 75 percent of American Axle's revenues come from GM, and union officials were angered by the fact that GM never tried to mediate the dispute.

Instead, the strike lasted more than 80 days and cost GM more than two billion dollars in lost sales.

American Axle came back this spring to ask the union for more concessions and then announced plans to close a major factory in Detroit that once belonged to GM, eliminating more than 700 jobs.

The lingering bitterness and suspicion from past disputes is clearly shaping the current negotiations, union sources said.

Jerry Tucker, a former member of the UAW's executive board, said he isn't surprised that GM is trying to take advantage of the current crisis to shift more production outside the United States over the union's objections.

"It looks to me like GM can't avoid bankruptcy and they're going to try and squirt out of the other side with their overseas operations intact," Tucker told AFP.

"They're hoping all the UAW's concerns won't make any difference," he said.

"But what can the UAW rescue at this point? They've already given everything away."

The latest plan put forward by GM calls for the closing of 16 US manufacturing facilities in the United States, including four assembly plants.

"This will result in the direct loss of 21,000 jobs," Reuther's letter noted.

And the number of vehicle GM plans to import in 2014 "represents the production of four assembly plants, the same number that GM plans to close in the United States," he said.

Source: AFP

Other news